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Will real estate ever be normal again?

nytimes.com

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Re: Will real estate ever be normal again?

#511

Post by harambae »

rnantes wrote: post #201

In Canada extremely unaffordable housing has been the reality since the Pandemic. I think the US is just catching up and when it does there will be more unrest because of how much influence the states have over social media and news in general around the world.

>when it does there will be more unrest because of how much influence the states have over social media and news

This sounds vaguely similar to a point Jim Rogers was making (on the Wealthion interview) recently - that back in 1930's people more or less accepted the screwed up and unfair system and marched onward. But people today (for better or worse) expect more fairness and will be angrier and react worse.

Re: Will real estate ever be normal again?

#512

Post by jjk166 »

tedk-42 wrote: post #463
arcticbull wrote: post #122

Earlier quoted context omitted.

This is only part of the problem - and a small part of the problem at that. The real problem as always is zoning. Houses cost roughly the same on a $/sqft basis, adjusted for inflation, as they did in the 1970s. They're more expensive now because outside of town they're twice as big on average [1] - in part due to zoning rules. In town, zoning rules preclude densification necessary for supply to meet demand [2]. And,…

Please stop. Zoning issues/lack of supply would imply that there are lots of homeless people without a roof over their head. Investors have too much access to property. It's a system of greed that benefits those who entered the market early (typically boomers). Just stop blaming zoning already.

There are lots of homeless people. There's an even larger population of people who are, for example, living in their parents basements, or over-occupying small apartments, or commuting for hours because they are living in distant, cheaper areas.

Re: Will real estate ever be normal again?

#513

Post by jeffreyrogers »

arcticbull wrote: post #488
sumedh wrote: post #361

Earlier quoted context omitted.

> This chart alone basically debunks the theory the Fed is solely responsible for lower housing affordability. Have you looked at Japan's population, its "dead ass flat" while US population keeps going up. https://datacommons.org/tools/timeline#place=country%2FJPN%2...

Doesn't really matter. What matters is that in Japan supply and demand are equal. You could achieve the same outcome in the US with more supply.

No, demand is actually down in Japan[0]. That chart shows residential housing vs. under 65 year-old population. So demand is decreasing but residential RE is rising slightly. Your analysis is also ignoring that services cost a lot more in the US than they did in the past. You can't build cheaply in NYC or SF or Seattle anymore because construction workers cost more.

[0]: https://lh3.googleusercontent.com/-xDrQEcMyF5Y/YWDyNh-3TiI/A...

Re: Will real estate ever be normal again?

#514

Post by jeffreyrogers »

john_moscow wrote: post #316
JamesBarney wrote: post #260

Earlier quoted context omitted.

It's only bad advice if we don't have a spike in inflation.

The way asset prices work, expectations of future growth are already priced in. So you are effectively talking about timing the market.

Yes, but people were saying this several years ago too. The truth is no one knows what is happening. We're in a new market regime that has not been explored before. Everyone is just guessing what's going to happen. Some of them are going to be right and do very well. Some of them are going to be wrong. People will say the ones who were right were smart and the ones who were wrong were dumb.

Re: Will real estate ever be normal again?

#515

Post by seanmcdirmid »

mbesto wrote: post #475
seanmcdirmid wrote: post #320

Earlier quoted context omitted.

So your statement was about 2nd order price growth vs the first order prices themselves? You literally said “the prices were through the roof”, not the growth. Yes something that is really cheap can experience rapid price growth and still be relatively cheap.

> You literally said “the prices were through the roof”, not the growth. Maybe english is not your first language but when something is "through the roof" it means it raises at a very rapid rate. In other words, speaking to the velocity, not the overall speed. > Yes something that is really cheap can experience rapid price growth and still be relatively cheap. You're being overly pedantic about this for no reason. Pu…

> Maybe english is not your first language but when something is "through the roof" it means it raises at a very rapid rate.

English is my first language, but I get your meaning now. It wasn't that Kansas property was expensive, just that it went from very very cheap to just very cheap very quickly.

Re: Will real estate ever be normal again?

#516

Post by seanmcdirmid »

imtringued wrote: post #444
seanmcdirmid wrote: post #186

Earlier quoted context omitted.

> It doesn't really matter if you add new stock at the top end or at the bottom end, people from the bottom move up, and make space at the bottom for new entrants. Only if the old housing stock isn't torn down to make room for the new housing stock. Thankfully property taxes aren't driven in the potential value of land (rather, they are tied to actual value), but most small scale landlords of affordable housing right…

>property taxes aren't driven in the potential value of land (rather, they are tied to actual value) That means multifamily properties have higher tax bills for absolutely no reason. Expensive locations need to provide more housing per area so charging a fixed fee based on the value of the land is a much better approach. You get to build a single family home and pay through the nose or split the bill with a multi fam…

> That means multifamily properties have higher tax bills for absolutely no reason.

Not true: most localities use a significant portion of property taxes to fund public schools, and more families = more kids.

Re: Will real estate ever be normal again?

#517

Post by seanmcdirmid »

sien wrote: post #422
seanmcdirmid wrote: post #225

Earlier quoted context omitted.

NYC housing has pushed outwards into Queens and the Bronx, manhattan is less populated these days because it lacks full time residents (the apartments are still sold, but their owners list upstate/Connecticut/long island properties as their permanent addresses, and they have many less occupants in them even when full, not like the turn of the century when more than a few people were crammed into small apartments). >…

Libertarians have effectively zero say in US politics generally. They have blogs. Trump and Bush Jnr couldn't care less about Libertarians. However, the place with the lack of Zoning rules that appeals most to Libertarians, Houston, is doing pretty well. Houston has seen an increase in population from 3.8M in 2000 to 6.4 M in 2020 and has a median house price of $285K. https://www.macrotrends.net/cities/23014/houston…

> Libertarians have effectively zero say in US politics generally.

The Republican party is inundated with Libertarian philosophy. Even the Democratic party is often forced to go along.

> Houston has seen an increase in population from 3.8M in 2000 to 6.4 M in 2020 and has a median house price of $285K.

Yes, Houston is probably the best example of a libertarian city in the world. Most of us don't want to live there, but someone obviously does.

The irony is that Singapore has a public housing fix to their problem, but is also often touted as being a very economic libertarian city state.

Re: Will real estate ever be normal again?

#518

Post by staticman2 »

cbozeman wrote: post #356
bogota wrote: post #215

Earlier quoted context omitted.

This is wildly irresponsible and terrible advice

It's exceptionally good advice. Jerome Powell has already made it clear through his actions that everything is now 'Too Big To Fail'. Capital is at an all-time low in terms of actual real cost to the borrower. You'd be an idiot not to borrow right now. If we keep seeing dramatic inflation, there will be some increase in wages, and it'll be enough to offset whatever interest rate you get, unless you're just an utterly…

You are only giving this advice because we've had a 10 year bull market. You feel excuberant and you are justifying it with fancy words.

Meanwhile capital is at an all time high in terms of price to earnings. There's no reason to think you know what the future holds.

Re: Will real estate ever be normal again?

#519

Post by anarticle »

throwvirtever wrote: post #107
uejfiweun wrote: post #45

The Fed at this point controls the whole economy and they have two options: 1. Raise interest rates and stop printing. Crazy inflation stops, but asset prices crash and we enter a major recession or depression. The end result will likely be unrest and blood in the streets. 2. Do nothing, keep printing. Inflation picks up massively. The economy keeps humming along but young people, including myself, are permanently pr…

I don't quite understand the obsession with homeownership. If a large enough percentage of people rented from property management companies, there would be more impetus to have strong tenant's rights laws to protect residents, and people would have more flexibility to move around. Moreover everyone would have an interest in increasing supply to keep their own rent down, pushing prices down toward cost-of-materials an…

The quality on homeownership can be several orders of magnitude higher than renting. Every time I have owned the appliances are much better, hardware is better, etc. If you are buying from previous homeowners they often have better maintained properties since someone had to live there longer than a year.

Also moving sucks, when your landlord wants to sell you have zero say and a timeline.

Homeownership gives you way more control over your life. Control comes with responsibilities, sure.

Re: Will real estate ever be normal again?

#520

Post by parasense »

uejfiweun wrote: post #45

The Fed at this point controls the whole economy and they have two options: 1. Raise interest rates and stop printing. Crazy inflation stops, but asset prices crash and we enter a major recession or depression. The end result will likely be unrest and blood in the streets. 2. Do nothing, keep printing. Inflation picks up massively. The economy keeps humming along but young people, including myself, are permanently pr…

Interest rates on treasury notes need to rise, period the end.

Yes, I understand the implications and entailment, but don't care about the risks. The cure has side-effects, yes... we get it, but low interest rates is cancer that cannot be allowed to become systemic new-normal nonsense. 10 or 20 years from now is when we see the lagging effects, and of course the problem we have now is short-term thinking.

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